CA Real Estate flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Fee simple absolute

The most complete form of ownership; it has a potentially infinite duration, is freely alienable, inheritable, and devisable, and ends only by the owner's death or transfer.

Easement appurtenant

An easement that benefits a dominant parcel and burdens a servient parcel; it runs with the land and passes automatically when either parcel is transferred.

Zoning variance

Administrative relief from a zoning ordinance's dimensional standards, granted when strict application causes a hardship unique to the property and not self-created.

Nonconforming use

A use of property that lawfully existed before the zoning ordinance took effect and may be continued even though it is no longer a permitted use.

Adverse possession in California

Title by possession requires five years of actual, open and notorious, exclusive, continuous, and hostile use, plus timely payment of all property taxes by the claimant.

Fiduciary duties COLDAC

A licensee owes the principal care, obedience, loyalty, disclosure, accounting, and confidentiality; the duty of confidentiality continues after the agency relationship ends.

Ostensible agency

An agency created when the principal's words or conduct lead a third party to reasonably believe an agent is authorized, binding the principal to the agent's acts.

Dual agency in California

An agent representing both parties in one transaction; lawful only with the informed written consent of both principals, and neither party's confidential information may be disclosed.

Confidentiality after termination

The fiduciary duty not to reveal the principal's confidential information continues after the agency relationship ends, along with the duty not to use that information against the former principal.

Agency coupled with an interest

An agency in which the agent holds a property interest related to the agency; it cannot be unilaterally revoked and survives the principal's death or incapacity.

Sales comparison adjustments

Comparables are adjusted to the subject: if the comparable is superior, subtract value; if the comparable is inferior, add value; the subject is never adjusted.

Capitalization rate formula

Value equals net operating income divided by the capitalization rate; conversely, the cap rate equals net operating income divided by value or sale price.

Gross rent multiplier

The sale price divided by the monthly gross rent. To estimate value, multiply the multiplier by the subject property's monthly market rent.

External obsolescence

A loss in value caused by factors outside the property, such as neighborhood decline, traffic patterns, or adverse zoning; it cannot be cured by the owner and is deducted in the cost approach.

Highest and best use

The reasonably probable use that is legally permissible, physically possible, financially feasible, and maximally productive, and that produces the highest present value.

Loan Estimate timing

The lender must provide the Loan Estimate within three business days of receiving the application, and the borrower must receive it at least seven business days before consummation.

Closing Disclosure timing

The borrower must receive the Closing Disclosure at least three business days before consummation; a changed annual percentage rate or added prepayment penalty restarts the three-day period.

TILA right of rescission

Three business days to cancel certain refinances and home equity loans secured by the borrower's principal residence; it does not apply to purchase-money or investment-property loans.

FHA minimum down payment

3.5 percent of the purchase price for a borrower with a credit score of 580 or higher, plus an upfront mortgage insurance premium of 1.75 percent.

PMI automatic termination

For residential mortgages, private mortgage insurance terminates automatically when the loan balance reaches 78 percent of original value, based on the amortization schedule.

Grant deed implied warranties

California grant deeds imply that the grantor has not previously conveyed the property, that it is free of undisclosed encumbrances, and that the grantor will warrant and defend title.

Race-notice recording state

A later purchaser who buys in good faith without notice of a prior interest and records before that interest is recorded prevails over the prior unrecorded interest.

1031 exchange deadlines

The taxpayer must identify like-kind replacement property within 45 days of closing the relinquished property and must acquire that replacement property within 180 days.

Documentary transfer tax rate

California charges $1.10 per $1,000 of consideration, equivalent to 55 cents per $500; counties may add up to 55 cents per $500.

Trust fund commingling

A broker must keep client funds such as deposits in a trust account separate from personal funds; commingling is grounds for license discipline even if no money is missing.

California fair housing classes

FEHA protects race, color, religion, sex, gender identity and expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, age, genetic information, and military status.

Liquidated damages cap

In a California residential sale of one to four units, the seller may keep a buyer's deposit as liquidated damages only up to 3 percent of the purchase price.

Transfer Disclosure Statement timing

Delivered as soon as practicable before transfer; if delivered after acceptance, the buyer may terminate within three days, or five days if delivered by mail.

Statute of frauds real property

A contract for the sale of real property, or a lease longer than one year, must be in writing and signed by the party to be charged.

Counteroffer effect

A counteroffer rejects and terminates the original offer, so the original offeror may no longer accept it; a new offer is now on the table.

Specific performance

A remedy compelling the breaching seller to convey real property, granted because each parcel of land is treated as unique and money damages may be inadequate.

Option contract consideration

The optionor's promise to keep an offer open is enforceable only if the optionee paid or promised something of value; without it, the offer may be revoked.